Market Round-Up

Updated: Feb 28 2003, 05:30am hrs

Call MoneyCall rates eased towards the close of Thursday trades after hovering in a range between 6.50% and 6.80% for most of the day. Call rates closed lower at 6.20-6.30% levels, from the overnight level of 6.25-6.50%, but initially remained firm amid tight liquidity in the system. Stray deals were also seen at 7% level, dealers said. The tight call rates is solely due to the outflow towards the sale of state development loans. State-owned banks the usual lenders in the call money market were seen borrowing heavily, after bidding aggressively for the on-tap sale. Call rates eased towards the close of trades after several borrowers switched to tapping funds at the export refinance window, where lending is done at 6.25%. The Reserve Bank of India ( RBI) did not receive any bids at its repos-auction while it accepted the single bid worth Rs 100 crore at its reverse-repo auction.FORECAST: Call rates seen firm on Friday.

Spot DollarThe rupee closed unchanged at 47.68/6850 per dollar, at a 17-and-half-month closing high, despite the rise in global crude oil prices. There was persistent inflow of dollars from exporters and NRI remittances from which the rupee gained support. The month-end dollar demand also eased which helped the rupee to stay flat. The market received considerable supplies by way of export inflows and expatriate remittances, which offset the impact of higher prices of oil, the countrys largest import item, dealers said. The rupee opened the day at 47.6850/6950. There were a lot of dollar supplies, but the market was held at 47.68, possibly by the central bank, said a dealer. The Reserve Bank of India (RBI) fixed its reference rate for dollar at 47.68 as against its previous fix of 47.69.FORECAST: The rupee is likely to gain further on Friday.

Forward PremiumsForward premiums eased further on Thursday on account of a stable rupee. There was high receiving interest shown by exporters and corporates. Both the six-month and one-year annualised dollar premiums closed a tad lower at 3.79% and 3.61% respectively. Forwards were seen down on the back of rising rupee and on expection of reduction in institutional interest rates. Indications that a war in Iraq may not be in the offing immediately also helped forward premiums ease off during the day. The benchmark six-month premium, payable at end-July 2003, closed lower at 74/76 paise. In month-wise premiums, the March dollar closed at 13/15 paise while in the far forwards, the December dollar closed lower at 144/146 paise with the January 2004 dollar closing at 159/161 Paise and the February dollar closing at 170/172 paise.FORECAST: Forwards seen easy on Friday.

GiltsGovernment securities market remained volatile on Thursday. Prices opened higher, but fell in afternoon trades on profit-booking as the annual economic survey on the eve of the budget, raised the fiscal deficit estimate to 5.5 per cent of GDP in the current year from an earlier forecast of 5.3 per cent. Prices were seen rising again towards the close after the bout of profit-taking. When the yield started nearing 6.5 per cent after the release of the economic survey, dealers felt that it was a good level to start buying again, a treasury head said. The benchmark yield on the 9.81 per cent 2013 paper eased to 6.4107 per cent, off its intra-day high of 6.4864 per cent, but was higher than 6.3355per cent in the morning. Overall, prices fell compared to their overnight levels.FORECAST: Prices seen reacting on the budget announcement.